NATURE, SCOPE AND PRACTICE OF
MANAGERIAL ECONOMICS
INTENDED LEARNING OUTCOMES
1. Explain how economics can be used for managerial decision-making.
2. Rank the steps of managerial decision making and management process.
3. Distinguish between Public and Private Decisions.
4. State the different phases of planning.
5. Formulate a simple strategic plan thru the use of SWOT analysis.
6. Develop a simple project plan.
Managerial Economics is an application of economic tools and techniques to business and
administrative decision-making; another term for the title of this course, namely economic analysis for
agribusiness and management.
Moreover, it is a branch of economics which studies the application of the theories, tools and
findings of economic analysis to managerial decision-making in all types of organizations, including
government agencies, educational centers, not-for-profit foundations and business enterprises.
Helps decision-makers recognize how economic forces affect organizations and describes the
economic consequences of managerial behavior. How? By linking economic concepts and
quantitative methods to develop tools for managerial decision-making.
Simply put, managerial economics uses economic concepts and quantitative methods to solve
managerial problems.
We place emphasis on the practical application of economic analysis to managerial decision
problems; the primary virtue of managerial economics lies in its usefulness.
THE ECONOMICS OF EFFECTIVE MANAGEMENT
(1) Identify goals and constraints;
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